Earlier this year a group set up to gain cross spectrum consensus on how to fund the councils wish list of mostly road projects put out a discussion document on its preferred options and sought feedback from the public on its preferences. One of the disappointments was the Consensus Building Group (CBG) were not allowed to consider whether the projects on the list would actually help to make things better so just had to find funding for everything. They started with an initial list of options that included:
- general rates
- targeted rates
- development contributions
- tax increment financing
- regional fuel tax and road user charge/diesel levy
- tolling new roads
- road pricing on existing roads (i.e. some form of network charging or congestion charging)
- additional car parking charges
- visitor taxes
- airport departure tax
- asset sales
They then narrowed it down to two options
We looked at a number of aspects of the debate including the fact that the plans cater for a massive increase in roading capacity despite the fact that many vehicle metrics including kilometres driven, vehicle ownership and the number of people getting drivers licences are declining. We also had a great guest post from Peter Nunns that questioned whether we should be implementing road pricing in a revenue neutral way first to see what further impact that has on traffic volumes before committing to additional funding to build large new projects.
In the end these are the key points I made a submission about.
Of the two options presented I support option 2.
- We should consider implementing road pricing in a cost neutral way in advance of the need for additional funding mechanisms so we can more accurately measure the impact it has on the transport network.
- Before any additional funding scheme is implemented, all projects need to to be put through a robust process to properly determine their economic impact along with the impact they will have on the entire transport network, not just on the specific area they are located in. The projects then need to prioritised according to which ones have the most positive impact.
- Additional funding should only be obtained for projects that will make a positive impact to the transport system and the exact impacts need to be made clear to the general public.
- Assessing projects based on the how fast they can move a single occupant vehicle is not a good measure of success, we should instead be taking into consideration projects that add the most capacity to the network.
Today the CBG are releasing their recommendation and the most surprising thing is how strong the support is for road pricing with 78% of the responses favouring it in some form. I’m at the announcement on the issue now and will update more after I have had time to go through the details but here is the press release:
Unprecedented agreement calls for action by 2015
Decisions by 2015 and an ongoing funding commitment from the government are at the heart of recommendations released today by the council commissioned group tasked with identifying alternative funding sources for Auckland’s transport.
‘Funding Auckland’s Transport Future’ identifies eight key recommendations that follow nine-months of deliberation by the group and reflect strong public feedback on the issue.
“My career in transport spans more than 50 years and never before have I witnessed Auckland make so much progress in just one year,” says Stewart Milne, Chair of the Consensus Building Group (CBG).
“This level of agreement between key stakeholders is unprecedented.”
Principally, the group has agreed that unless Aucklanders are prepared to accept significantly higher rates increases and heavier congestion, introducing some form of road pricing by 2021 will be required. According to the report, these decisions would need to be made by 2015.
The group has also strongly recommended that the government increase its funding for transport in Auckland and establish mechanisms that support an ongoing commitment to increased government funding.
“Recent commitments by the government are the first step toward securing long-term financial support for improvements to Auckland’s transport infrastructure,” says Stewart Milne.
In April this year, the group asked Aucklanders to consider two possible options for funding the 30-year transport programme and the response was overwhelming. Of the 1320 responses, 78 per cent were in favour of some form of road pricing.
“While the feedback indicates public support for road pricing it is our belief that detailed work is needed on the design of possible road pricing schemes and on addressing the social and economic impacts.”
The report will be formally received by Auckland Council’s governing body on 25 July.
The big question with road pricing is how it would be implemented. If done simply as an off ramp toll, as suggested this morning in the herald there is a risk that it simply shunts a lot of vehicle trips off the motorways and onto local roads which shifts the problem, not improves it. I will wait till I have more details before commenting much further though. Regardless of the outcome, perhaps the biggest benefit to all of this is process is that we have had groups from across the spectrum working together. They might not agree on the exact details but them working constructively together has likely been one of the aspects that helped to convince the government to help fund the City Rail Link.
The timing of this seems to have worked out well with our proposal announced last week of the Congestion Free Network. One of the biggest issues we have is that even with all of this extra funding it is still projected that almost all transport measures, including congestion will get worse. If we are spending $60 billion and things still get worse then we feel it is time we started looking much harder at what projects are on the wish list, whether they are actually doing anything to help the situation or in the case of many of them, likely making it worse. We think that at the very least we need to change the priorities of the projects, bringing forward those that create a true high quality alternative and giving people some real choice in how they travel.
We’ve already seen the massive impact that high quality PT routes can have with the Northern Busway leading to significant growth in bus patronage across the harbour bridge at peak times. The number crossing the bridge by bus increased from 18% in 2004 to 41% in 2011 and we expect we will see similar results from investment in other high quality alternatives. What’s more it would actually be cheaper than what is currently planned. The mode shift would likely see the justification for many of the expensive roading projects diminish greatly, either putting off the need for them, or eliminating it entirely. This in turn may reduce or even remove the need for additional funding (although we still support road pricing in a revenue neutral way).
Processing...
The local roads issue may or may not be a problem. There may be some local roads that are able to cope with more peak traffic and, as long as they do not adversely affect local inhabitants – be they business or residential – it could assist with reducing the need for more roading as a by product. Other roads that could be adversely affected by ‘rat running’ can have traffic calming implemented which can improve the roads at times other than peak and also limit the number of ‘rat runners’. Win – win. As long as we don’t fall in to temptation to upgrade local roads for increased traffic flow to compensate. SH1 through spaghetti actually flows pretty well even at peak last time I was down there in the AM. I think most of the problems regarding congestion are at Fanshaw, the Port, Tamaki Drive and Nelson. If we follow the Singaporean example, off-peak there would be very few roads with any charging at all.
No Bryce local roads will almost certainly be a problem. Do we have any idea at what price threshold Aucklanders will avoid the SH network? The evidence from the US is that it doesn’t take much of a toll for the uptake to fall.
Here is an article from Toronto supporting Matt’s belief that road pricing is a way to use a network more efficiently but not as a way to raise much revenue:
http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/articles/HOT-lanes-CSR-summer-2013.pdf
A more academic analysis here, again in favour, but from the efficiency angle only: http://faculty.wcas.northwestern.edu/~jdh386/documents/Hall-ParetoImprovementsfromLexusLanes-June2013.pdf
Patrick, I don’t quite get where you are headed with your post. I consider road pricing along the same lines as variable parking pricing, in that it can assist with utilising existing assets effectively. In the context of the CBG, I think their revenue forecasts of such a scheme may be a bit over optimistic. Have you had a look at the pricing in Singapore? It’s pretty cheap overall. We don’t know enough details on how they came to their conclusions. Reducing the spend is obviously the easiest way to reduce the required income.
Matt can we please add to your excellent list above:
5. impacts of transport investments on place quality of the whole city must also considered.
So not only effects on the transport system but also the quality of the city as a whole. This is directly related to the wider goal of increased liveability. Transport is, after all, only a means to an end. It is possible to improve a movement system yet make the city worse off as a result. No more silo-ed thinking please.
Just one thing to clarify there. When you say the number crossing the bridge by bus has increased from 18% to 41%, this is during the peak hour.
On a daily basis it is more in the range of an increase from 5% to 10%. Still impressive but 1/4 of what you said.
I guess the important bit is that the bridge, and approaches, cope other than at peak times so not as important.
Well, it just so happens that I have a graph right here to tell me such things. It seems that northbound flow starts to run into trouble at 7am and takes to 11m before it gets back to normal. In the evening it gets hit with a hammer at 4pm and then gets back to normal at 7pm.
Heading southbound it purrs like a kitten all day long it seems, with a slight slow down between 7:30am and 8:30m.
When I lived over the shore it struck me that the bridge itself was ok but the Onewa and Akoranga off ramps used to hold things back quite a bit.
My graphs would agree with you. Heading southbound through esmonde road it starts to slow down at 6am and can take till 10:30am to clear.
I’d love to see this graph. I travel the bridge 10 times a week at peak and I struggle to see a huge problem. But let’s see the figures.
What part of “purrs like a kitten” makes you think I said that there is a huge problem with the harbour bridge?
The part of “purrs like a kitten” that says,” hit with a hammer”.
So your saying that for the 10 times a week you head northbound during the evening peak you have found it congestion free through there?
That’s rather interesting as a few months back people here were complaining that the northbound buses get stuck in congestion there. Even on the NZTA web site it shows the average speeds dropping down to 30km/h most days during peak.
Are you sure your talking about the Auckland harbour bridge here? The big 8 lane one?
It’s always congestion free in the motorbike lane. Just between car lanes 1 and 2.
@SF yes the northbound peak is congested on the bridge. Southbound 3pm-7pm can also be very volatile due to CMJ and Newmarket constraints.
SF, read the post again. Matt makes it clear that he was talking about peak times: “…bus patronage across the harbour bridge at peak times. The number crossing the bridge by bus increased from 18% in 2004 to 41% in 2011.”
And whatever the denominator, bus patronage on the bridge still increased over that period.
The other thing to note here.
If you are to do item 2 for all projects you will effectively price any pedestrain, cyclist or bus priority projects out of the picture. It would only be the high capital expenditure projects that could justify the investigation.
You have answered yourself here, haven’t you? You only do it on large-scale projects. Say anything more than 10-20 million a project or so? Smaller projects by definition also have less “external” effects.
Well that’s the tricky part max. If you look at the post project reviews matt posted a while ago it was the “small” projects in the range of $10 million that were the most suspect.
A number of them got loaded onto larger projects with no consultation or investigation and in a number cases proved to be of no benefit what so ever.
In other cases they have actually stuffed up what would have otherwise been a good project.
Of course sometimes it goes the other way where a 5% saving is achieved at the expense of throwing away 50% of the benefits of the project in the first place.
SF, read the post again. Matt makes it clear that he was talking about peak times: “…bus patronage across the harbour bridge at peak times. The number crossing the bridge by bus increased from 18% in 2004 to 41% in 2011.”
And whatever the denominator, bus patronage on the bridge still increased over that period.
As a tool to address congestion the evaluation of the Busway is correct to focus on the peaks. This is the metric we hope to effect. The motorway network performs perfectly well at 4am. In fact it is overbuilt for most of the time.
And there is no possible road project anywhere near as cheap as the Busway that could reduce traffic journeys across the Bridge by 40% yet still get the these people across [Yes Swan we could price people off the road completely, but social exclusion is not in NZTA or AT’s remit].
Using my little graphs again. It seems the motorway has the right capacity for about 12 hours of the day, not enough for about 4, and then too much for about 8.
I’d say if we looked at the busway it has too much capacity for about 20 hours of the day.
None the less it is a great tool and works wonders during peak hour.
Your point being? That peaks are the problem?
Nothing new there SF. We all agree around here that catering for the peaks is where all the money goes. And from what I gather of your occupation, so do you.
As Patrick says, by (using road pricing signals to assist with) smoothing the peak demand – by using other modes e.g. PT
Surprise! – you actually get a better outcome for everyone for usually a lot less dollars than if you just build more roads.
I had 3 points.
1) the motorway network is not over built for most of the day but rather operating as intended.
2) regardless of mode you will always have a redundant amount of capacity.
3) PT tends to spend the greatest portion of its time underutilized.
I added however, despite point 3 PT is of great value as it is so good at handling peak flows.
I have to say that I am somewhat uneasy about road pricing in Auckland. Given the paucity of alternatives to driving, it feels like a policy that has more stick than carrot. That said, it isn’t strictly a bad idea. It would help to make better use of existing road space, and is probably an inevitable development long term, but I fear that in a hypothetical ‘what if it was introduced tomorrow’ sort of way, that we’re currently in a position where it may well do more harm than good.
Well I don’t mind user pays – as long when I don’t use, I don’t pays.
Unfortunately, we all know that there is no such thing as true user pays.
Example of price signals that you already have in place now which suffer from this:
Water rates, wastewater charging, electricity line charges. All theoretically user pays, but which come with a big dose of “fixed network charges”.
So that even when you don’t use you still pay.
Same with roads really – even if you never drive on a road, you pay for it via your rates.
The big fishhook, here is to make the road charges net as widespread as possible, after all if the motorways are clear of congestion but the roads are not, then the bus network that needs those roads will become a nightmare and traffic may not even be able to reach the motorways due to local road congestion.
Singapore’s ERP pricing is somewhat different and they have a pretty good MRT system to most places so that you don’t need to drive to get most places.
The three poster children for road pricing all had extremely mature Transit networks before the introduction of their Road Pricing schemes: London, Stockholm, Singapore.
The schemes were not introduced in order to pay to build these networks.
If our 2020 CFN network was in place before introduction then RP would be a lot less regressive than if it was introduced now, but still it would be a very different situation to those cites above.
Singapore’s MRT was built well after their first road pricing scheme. It doesn’t mean I disagree with you, just pointing it out.
It is a pity some form of capital gains tax wasn’t included in the mix, which could take the form of a rate levy on areas benefiting from PT enhancements. Melbourne’s CBD rail loop was funded by a levy on CBD properties, and has now been paid off. While it’s not actually a capital gain, it was paid by those whose properties were appreciating through construction of the rail loop.
In suburban Melbourne, houses in suburbs with rail sell for $50,000 more than equivalent suburbs without rail access. Again a levy on the suburbs benefiting would capture some of the capital gain that would otherwise be captured by those with properties in the serviced area. This is a better form of funding than increasing PT fares above the inflation rate, which would tend to drive the poor and students off the system.
The CBG seems to be going in a direction that no other city has experience with. The 3 example cities above use it more for rationing of road space than for generating large amounts of money to fund new infrastructure. To generate sufficient funds for new infrastructure requires 24 hour tolls.
Good idea – a rate premium on houses within a 1k of western line stations for the CRL?
How bout a rate premium on houses not within 1km of a station instead? That should encourage the right kind of land use response.
I think you have that backwards.
Nope, I mean we shoul rate extra those people that chose to buy in areas poorly served by public transport. Put up the price of unsustainable housing-transport choices that get externalised to the city as a whole.
How does that change the land use response in the right way? Higher land taxes encourage development if anything, they certainly don’t discourage it.
Rates aren’t just land taxes though, they are charged against both the land and the house. Apply an extra levy to new housing in an area and you’ll get less housing there.
Yes so make the rate premium next to stations based on land value alone. We already have fairly hefty levys against new development – not sure anymore will raise much in the way of funds more than discourage investment – fairly tangential to this discussion in any case.
If property values rise as a consequence of quality transit then rates will naturally rise. No extra levy required.
Are you suggesting the CRL will be self funding via rates?
No but there will be an increase in rates income. Who knows over a long period of time though. Is the rebuilt rail network leading to improved property prices near station? It appears to be. I don’t live near the rail line but in the same way I would be opposed to a levy for business local to the CRL, I would be opposed to a levy of places next to a regional park. These kind of amenities improve Auckland as a whole, not just individual businesses.
Regional parks don’t require billions of dollars of funding though.
Even if something benefits Auckland a a whole, it will still benefit differentially across areas.
Given that the current Government has always said that they will not allow a regional fuel tax or road pricing then it appears that the CBG has wasted it’s money.
And if anybody seriously thinks that the ratepayers will be able to afford the required increases they are dreaming!
I find it unusual, almost provocative, that both options include items the govt has explicitly ruled out.
Back to the drawing board if National gets back in.
I’m not so sure it’s that simple. Nats won’t allow charges for use of NZTA assets, but if council in effect said “we’re going to charge users of motorway off-ramps to use local roads, and divert the previous rates money that was used for local roads to PT” then that would be meeting the Nats main objection- that you don’t charge road users twice for the same asset.
I don’t think it’s that simple – I believe the NZTA’s control extends further than the end of the off-ramp to include the whole interchange.
It doesn’t matter who controls the road, since neither councils nor NZTA currently have the power to toll any existing roads. Parliament would need to amend the LTMA to allow for any sort of road charging (other than a toll on an entirely new road).
Errr… to finish that thought: That means that there’s no cheap trick (like tolling off-ramps) that avoids the need to get the Government on board.
And as Steve D points out, any ‘new’ tax will require the Government to pass legislation.
The only options the council has without getting Govt approval are probably:
– increase rates generally
– increase rates targeted (ie. innercity carparks or properties more/less than 1km from public transport)
– sell council owned assets.
– developer contributions (which is really just extra rates paid upfront).
Borrow and hope – to finish your list.
Love that Swan, though I should add not waste money in the first place.
Wheres on earth is all this extra money going to come from and what is going to suffer as a result if this wish list is implemented? I do not want another centimetre of motorway built and I certainly do not want to see existing (paid for) roads tolled. This endless quest to fleece the public of cash through one tax or another has to end, its killing us.
The list of wants has to be soundly considered almost at referendum level. Forget who donated how much to the National Party and think what is best for society.Given motorways and endless roads cost us dearly and not delivered how about scrapping those “wishes” and look at a more long term solution. I’m also concerned that PT fares rises are yet again floated. Talk about kill an option they are trying to promote.
Why were extra rates on CBD car parks ruled out?
“Why were extra rates on CBD car parks ruled out?”
This is a serious question. Ruled out because it doesn’t raise enough money? This seems an obvious area to increase revenue.
Probably wouldn’t raise much, but also city retailers traditionally fear losing drivers to the suburban malls, not understanding that that horse has bolted and that they really need to offer something much better than cheap parking to improve sales. They need the city to offer a whole experience that St Lukes never will…. cheap parking and lowest prices are not the market they should be after
From page 30.
“Of the two options, submitters were overwhelmingly in support of Option 2. We received 1,025 responses in support of Option 2 and 187 responses in support of Option 1 (108 submitters chose neither option). We acknowledge that the responses to our discussion document do not constitute a representative sample.”
Given that the Government has ruled out a regional fuel tax and road pricing this leaves a $400M rates increase which is clearly not sustainable.
I gotta say it again, vehicle speeds or congestion are not good measures of transport success. Better would be throughput – people transported per hour by all modes.
On average person kilometre per hour, regardless of mode.
A measure that could be within the Council’s jurisdiction without requiring new legislation is an inner city parking levy charged as a “peak hour entry levy”. This could be a charge of $3 for entry between 7am and 10am, after which no Council charges apply. Nurses who start before 7am would be exempt, as would shoppers arriving after 10am. Those using hotel carparks overnight would be exempt. Since the morning traffic peak is more congested than the evening peak, there would be no need to levy peak hour exits. Anyone starting work before 7am or after 10am would be shifting their evening peak road use to a time of less congestion. Parking facilities without the equipment to charge a time-of-day levy would pay an amount per space. A levy on morning peak entry into carparks would be a recognition of the effect peak hour car commuting into the inner city has on congestion throughout the road network, and is an easier place to charge than gantries on each road entering the CBD.
But how much would it raise ? If all 60,000 parking spaces were filled each working day between 7am and 10am, a $3 levy would generate only $45m per year, a $5 levy $75m per year, and a $10 levy $150m per year. Beyond about $5 per entry there would be hardship, businesses turned away from the CBDs, and a reduction in income because spaces fail to fill.
Similar calculations could be done for CBD entry gantries. Entry fees would raise a similar amount, but be more expensive to administer, create a perception that the inner city is an expensive place to do business, and it would be more clearly seen that it is a Council fee than a carpark fee. For all the cost and political flack, not a lot of money would be raised.
I’m pretty sure that would require new legislation. Councils don’t have the ability to levy arbitrary taxes – and a good thing too, if you look at the madness of trying to comply with taxes somewhere like the US, where up to four tiers of government all levy separate income and/or sales taxes.
The council can apply a special rate to inner-city carparks, but it can’t do it selectively based on things like when and how much the carpark is used. Rates (for a category of property) are the annual uniform charge (the same across the district) + a proportion of the rateable valuation. Development charges likewise can’t be based on how much the park is used, since they get charged before it’s built.
Gerry Brownlee is really opposed to road pricing. I think it’s because:
a) it gives Auckland too much say over its own transport projects (currently controlled by central Govt)
b) it is likely to reduce the amount of driving which means a reduction in Govt’s fuel and road user taxes